Pakistan receives $700 mln funds from China: Ishaq Dar, Pakistan’s Finance Minister, announced that his country has received $700 million from the China Development Bank. The deposit comes as Pakistan has been struggling with its external debt and has barely enough dollars to cover less than three weeks’ worth of imports. Finance Minister Ishaq Dar referred to the deposit as a “lifeline” for Pakistan.
February 2023 Current Affairs Quiz
Significance of This Deposit by China to Pak:
The loan will help to replenish the country’s dwindling foreign exchange reserves, and it is expected to arrive this week at the State Bank of Pakistan. The coalition government has been trying to increase the country’s foreign exchange reserves, which currently stand at $3.25 billion as of February 17.
However, the delay in the revival of the $6.5 billion International Monetary Fund (IMF) programme has made it difficult for the government to achieve this goal.
Refinancing of Loans by Pakistan:
Pakistan also intends to refinance two additional commercial loans worth a total $500 million and $800 million. In total, Pakistan is aiming to refinance Chinese loans up to $2 billion by the end of February or the first week of March 2023.
This deposit from China is expected to ease some of the pressure on Pakistan’s economy, which has been struggling due to the pandemic and external debt.
Pakistan’s Total Debt:
Pakistan’s external debt servicing obligation for the current fiscal year 2022-23 is $23 billion, of which $6 billion has already been repaid and $4 billion has been rolled over, leaving $13 billion unfunded. The country also has further repayment obligations of $75 billion during FY24-26.